Why You Should Trim your Pitch Deck to Make it MORE Effective | Toba Capital VC Patrick Mathieson

Thanks for the intro, guys. Thanks for having me. My name is Patrick. I'm an associate at Toba Capital. It's a venture fund based out of California. I haven't been working in VC for that long, so a lot of what I say could be totally wrong. So don't believe everything I say. But basically, we're going to talk about how to talk to venture people and how to talk to investors. From what I understand, a lot of you guys, some of you are like later along. You have companies that have kind of already started, and some of you are still kind of figuring out what you're going to do. I'll try to be general if possible and just talk about talking to investors in general, because some of this stuff might be more or less relevant for some of you. Oh, it works. Cool. This is our fund. This is probably not that very interesting to you guys at all, but we're a pretty young fund. We invest about $100 million a year into software startups. It's all enterprise B2B type stuff. You guys may or may not have— have any of you guys heard of these companies? They're not like Uber, Snapchat, but they're just— I've heard of them. Yeah, they're awesome companies, but they're not like household names. That's kind of what we like is sort of enterprise back-offy stuff. So I guess what I'm going to talk about today is just basically some tips on how to have conversations with investors, and hopefully I can be useful to you guys. You guys can learn a couple things. The reason I'm here is— or at least got put in touch with the Draper guys is because I wrote a blog post recently which covers a lot of this stuff. If you Google, it's called Surviving Your First Phone Screen with a VC Firm. That will have more detail than what I'm talking about today. Do they get the slides afterwards?

Yeah.

They get stuff? Yeah. So there's links and stuff in here. That's a better primary source. I'm probably going to screw this up as I try to explain it. So hopefully you guys can check that out. It also has a list of things to keep in mind, questions that VCs might ask you and that sort of thing. So that would be a good thing to check out if you have some time. So I'm going to walk through kind of a typical encounter that you might have with investors or venture folks and sort of talk about how that will start off. So this would be especially— will make the most sense if you're raising a seed round or an A round and you're You're getting in contact with investors and VCs for the first time. And this is like a very typical scenario that should kind of frame what the rest of this presentation is about. So first off, you get in contact with investor, VC, whatever. There's a million ways to do that. I mean, it could be— is it Adam Draper? Is that his name? Who was just sitting here? Yeah. It could be him you meet from here. It could be someone that you meet because you answer their question on Quora or something or on Twitter and you meet. Investors that way. It could be you go to an accelerator. But there's a million ways to meet venture folks, and that's kind of outside the scope of this presentation. But point being, you have some reason to call them or email them. So you send them an email and you say, hey, I want to tell you about this awesome startup I have. It's this amazing idea. It's going to change the world, blah, blah, blah. Can I have a meeting? And then they will say to you, eh, you know, before we have a meeting, I'd love for you to take a phone call beforehand. So let's do a 20, 30-minute call, not necessarily even with the partner. So there's folks like me at venture firms called associates, and what we do essentially is screen incoming opportunities for the fund before they make their way to the partners. So there's the partners that are like the general partners that make the investment decisions, and the associates are the ones that do the research. So it's very common that you could kick down to a phone call with an associate beforehand, and you might think that this is like, Oh, I'm not getting face time with the partner. This totally sucks. Why am I talking to this 22-year-old person? I should be talking to someone more important. But it is important to get past this person because they're basically the gatekeeper to the fund. In my job, for example, I don't make investment decisions, but I can basically stop you from meeting partners later on. So it's important that you actually— and that's the point of this blog post that I tried to make is it's important to survive this first phone call, make a good impression, and go further along in your relationship with the fund, which is what I'm going to kind of go through today, which is what I just said here. A good analogy is dating, actually. It's like a first date. A lot of people approach stuff with investors like, hey, I had this meeting with a VC. How do I get them to put money into my company? How do I succeed? And that's like saying, oh, I'm going on a first date with this girl. How do I get her to marry me? It's just kind of like putting the cart before the horse. Meeting with investors, it's a two-way relationship. You want to feel out if they're going to be good fits for you, and they're trying to figure out if you're going to be a good fit for the fund. So I think that thinking about this as getting to know someone, it's almost like a first date, is kind of a healthy way to think about it, because both sides can pull the plug at any point. You're evaluating the investor to the same extent that they're evaluating you. By the way, if you guys have questions or anything, just— Just raise your hands. Wow, that's a lot. So I'm going to structure this around 5 sort of main takeaways, main tips for your interactions with investors. I'll go into more detail on each, but number one basically is trim down your pitch deck. So as part of what you do in this, do you guys make pitch decks? Do you guys kind of make that whole thing?

Yeah.

How big are they? How big are they expected to be? It's a pitch. Oh, so they're short. OK, so you guys never make a very long, full pitch deck?

We make a long one, but we only are supposed to present a 2-minute one. It's got to be 2 minutes.

Perfect. So you guys are already doing exactly what my advice is going to be. So a lot of people that approach venture capital funds like ourselves have these enormous pitch decks. Or even worse is 50-page memos. A lot of bankers are circulating These outrageously long memos that are just super, super duper lengthy and bad. In your case, you're doing a 2-minute presentation through Draper, but a lot of times if you're meeting with other investors, you might have a 20-minute phone call to go through your slides. It's important to think about sizing the materials that you share with investors based on the kind of conversation you're going to have. If you have a 2-minute presentation, what is that, 2 slides? 3 slides or something like that? No slides? Like just 5 slides?

Yeah.

So size for that, you might have a first phone screen, which is like 10 slides that you go through with an associate, and then when you have your big pitch to the partners, which could be later on, then that could be 30 slides or 20 slides with an appendix. The point is just think critically about that. It sounds like you guys already know what I'm talking about here. 10 slides is good. for first call with VCs if you end up going that direction. What do you mean when you say with an appendix? With an appendix? So, you might have like 50 slides of material just that you've made to be as comprehensive as possible to explain all the angles on your business. You do like market analysis, competitors analysis, like this is how we're going to make money, this is like a financial analysis, all this. The things that go in the body of the main presentation, like either, like we just said, 5 slides, 10 slides, are before the appendix, and everything else you just shove in the back. So you could literally have a 5-slide presentation with 50 slides in the appendix, and then those are used for answering questions. But I guess general advice is being— one second— being concise in general is really good, not just in a pitching sense, But just as an entrepreneurial skill, if you're a CEO of a startup and you're going to be— let's say it's a successful startup and you're going to spend 10 years running it and selling it to people and selling it to employees, selling it to customers, selling it to the press, being able to convey what you guys do in layman's terms very concisely instead of falling into business jargon is just a really important skill in general. Because if you're talking to I don't know, TechCrunch, because you have this amazing startup that's taking off, you want to be able to explain it in a way that's totally comprehensible just to the common denominator of all readers. And it's a very typical startup entrepreneur trait to want to get super technical and get as detailed as possible from the beginning. So practicing being concise in general is a really good skill just across the board. You had a question?

That's super great advice and something that I'm working on now. One of the things I wanted— that kind of leads me into the question of being concise. We had someone come in and talk about networking and how to get a hold of people, like the gatekeeper you're talking about, going to an associate rather than the partner. So when you do send that first email, something I've been trying out is using bolding very selectively. What's your opinion on that? I know it's a very specific question.

I think it's great. If you look at Any people do like Optimizely or people that do analytics on blog posts or tweets and things— not tweets, but you know what I mean, like content that gets passed around and gets read. You always see that the conversion rate or the read rate or whatever goes up when you make it easy for the reader by doing bold and maybe not italics, but I think bold is probably the best one, just to draw your attention to the main points. Messaging is super key in general for people that are doing startups. If you, just like you said, if you have an introductory email, maybe it's 2 paragraphs, and you've honed down in, this is what we do, in like a 15-word sentence, and that's in bold, that's what catches the eye first, not only does it make it easy for the reader to understand what you're doing, but it also impresses them with your ability to communicate effectively. So I think it's good. Who gave you that advice about the bold?

It was actually my roommate.

Oh, nice.

There's a program that keeps your Emails under 160 characters, or a few lines. I forget what it was. But that just gave me the idea of bolding and being able to go through a huge paper, and you can read it if you'd like to, or you can go to each bolded point and make— you can create your own story through it.

Yeah. Being concise in general is just a super important skill for any kind of presenting. I've tried to keep these slides concise. They could be more concise. But generally, big blocks of text are just bad. No one's going to read them.